IBM: you need a personalised customer experience to breach real and digital worlds

Systems such as AI computer Watson will help companies bridge
the gap between the real and digital world, says IBM's Paul Papas,
bringing a new kind of personalisation to customer service.

Speaking at the Ignite conference at London's Millbank Tower,
where Wired.co.uk was in attendance, the global leader for IBM's
Digital Front Office noted that customers will have to be at the
centre of any business strategy as they increasingly come to expect
more from their services. A Global
C-Suite study IBM recently conducted, found that 55 percent of
4,183 CEOs interviewed cited customers as the biggest single
influence on strategy. Forty-four percent of CEOs expected to open
up their organisations "to empower individuals" in the 2012 survey;
that figure increased by 27 percent in 2013. According to the IBM
study, a one percent increase in customer satisfaction engenders,
on average, 4.6 percent of market value

"We need to deliver a new more innovative customer service,
because you can work so hard but one failed interaction, one little
swipe on a touchscreen, and you could lose them forever," said
Papas. Just as businesses are predicting increased customer
collaboration, customers are already demanding personalisation.
After interviewing 21,000 customers IBM found 90 percent were
willing to spend up to 20 minutes uploading preferences in a mobile
app so the company could personalise the experience for them.

"Only 32 percent of companies we spoke to have ability to do
this," said Papas. "There is a personalisation gap between the 90
and 32 percent."

Giving the example of the IBM's Watson, which has been installed
in hospitals to help find new ways of treating cancer, Papas said this kind of
intelligent computing power can bridge the gap between the digital
and real worlds and start to match customer expectations.

"How do you drive meaningful relationships? We need to use
analytics and get at people's underlying needs," said Papas.
"That's what Watson helps us do. Using it in a mobile app for a
bank, it can actually answer questions such as 'how much will it
cost to send my daughter to college?'"

"It takes in the daughter's age and sifts through all the
available information. In several milliseconds Watson analyses 96
thousand bank articles, 18,000 call logs, 32,000 product briefs and
22,000 web pages. It integrates with what we know about the
customer to synthesise external big data. The answer it gave was
that a 4 year degree at a local university would cost $135,000
(£84,000) for state, and $340,000 (£211,000) for private. A
customer could go into a bank and have that interaction mediated by
a bank teller typing that question into Watson."

This move toward a customer-centric world was echoed earlier in
the day by McKinsey director Richard Dobbs. "If we were to tell you
20 years ago you could have a service in your house where we will
offer you to search all the knowledge in the world that is publicly
available, you would have thought it cost about $200 (£124) or $300
(£186). You would never have believed Google would give it to you
for free. Google has come in and created value for itself, and
destroyed value in other sectors such as advertising -- but the
biggest gain has been for the consumer."

"There has been a huge change in behaviour," he continued.
"Consumers are prepared to discuss ideas and get references from
each other. But it's still not just a digital world; we have to
work in the physical one too. Korean shoppers have to see their
products, for instance, not just order online. So at subway
stations they can see products, swipe with their smartphone and
have them delivered to their homes. Drinks machines can also
recognise your face and run appropriate adverts. It's the physical
and digital world interacting."

Papas cited three examples of how the kind of digitally mediated
personalisation we need, has already been implemented by
businesses.

Rugby Football Union engages customers before, during and after
a match, using things like real time analytics to track the game's
momentum and say how confident you should feel in the outcome. "It
tracks individual key influencers, and delivers this accordingly
whether you're in the stadium or watching from home. It uses
digital information to take excitement to the next level."

IBM has transported 100 of its Customer Experience Lab employees
to work with clients in the field, using commercially available
tech to change things. "One innovation was an augmented shopping
advisor that uses advanced image processing in your
smartphone camera to recognise items. It works the same as our eyes
do. If you like low-sugar cereals, for instance, it will look at
all products on the shelf, taking that all in at once, and circle
ones with your specific needs. This kind of technology is no longer
location specific -- it's actually recognising items."

Lastly, Papas cites a Jaguar Land Rover virtual dealership that
lets users modify a life-size virtual vehicle model on a huge 8ft x
12ft screen using motion technology. Sticking your hand out, for
instance, will open the car door, and pressing an imaginary start
button causes the engine to roar. "There is exponential growth use
of this. You can use motion analytics to start analysing what
people are using and where they're spending the most time."

Key to success of these kinds of technologies is privacy.
Customer personalisation should not come at a cost that stops that
customer engagement -- a savvy userbase will become more conscious
of how companies could take advantage of their data, and won't play
ball if they don't like what they see.